Despite the economic downturn and concerns over corporate investment, local mobile phone operators say their expansion plans are on schedule for 2009 as the industry continues to grow.

"Our expansion plans are on track," said Adam Cabot, CEO of Star-Cell. The company announced last year it was going to expand services to all of Cambodia's provinces for its 100,000 subscribers.

"Yes, [the crisis] will have an effect, but it is hard to say how much. We are still maintaining our position and doing well," he said.The company would not comment on its earnings for 2008, but said it plans "a very aggressive program for 2009".

Rural marketCambodia's low mobile penetration rate is a draw for many companies such as Vietnam-based mobile operator Viettel, which is launching a major drive to tap Cambodia's rural market and bring schools online. Hong Anh Xua, president of Viettel, could not be reached for comment on Monday, but Prime Minister Hun Sen's spokesman Eang Sophalleth said Viettel's rural expansion is part of the government's own plans to increase phone usage outside the capital.

The Cambodian government says private operators like Viettel are therefore providing an important service for rural areas.

"Samdech [Hun Sen] supports the investment because it has contributed to the development of our country," said Eang Sophalleth.

Cambodia's mobile market has grown rapidly in the past five years, and companies are scrambling to gain a foothold as phones and the internet gain popularity.

Domestic mobile-phone usage surged 49 percent in 2007 but the national penetration rate remains a low 17 percent. In contrast, neighbouring Vietnam saw 75 percent growth with a 33 percent penetration rate in the same year, said Budde Comm, an independent telecoms analyst.

SERVICES HAVE IMPROVED IN CAMBODIA WHILE PRICES HAVE DROPPED.

Internet access is available in all provinces, but the lack of a national fiber-optic cable network means that service is slow and unreliable. One major cable line runs through the Thai border to Vietnam from Kampong Cham province to Sihanouk province. A second cable links Cambodia to Vietnam and Laos. The ministry is working with the Lao government to connect the fibre-optic cable from across border to Cambodian provinces, which it hopes to compete by April.

"This is a free-market policy that will benefit the people and will attract more investors. Telecommunications services have improved in Cambodia while prices have dropped," said Eang Sophalleth.

So Khun, Minister of Posts and Telecommunications, told the Post last Tuesday that the ministry welcomes new competitors in the phone market and that more companies will lead to cheaper services.

"I think the telecom business still has a lot of room to grow. There are still many Cambodians who do not have phone services, which is a big opportunity for new companies."

He said internet and phone service prices will drop once more competitors enter the marketplace.http://www.phnompenhpost.com